Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.

In business, economics or investment, market liquidity is a market's ability to facilitate the purchase or sale of an asset without causing drastic change in the asset's price.

Liquidity measure how easily you can convert your asset into cash.

For example if you have a Gold, the you can easily convert it into cash , but suppose you have a Home and you want to sell it then it is very difficult to sell it immediately.

So in this case Gold is more liquid than the Home.